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Retailers claim that Realme is pressuring them to sell pre-activated phones so that their sales numbers look better.

Mobile retailers have alleged that smartphone brand Realme was forcing them to sell pre-activated handsets to show higher sales numbers. Realme, in a statement to ET, denied the allegation stating it never sells pre-activated devices.

Mobile retailers said the pre-activated devices deny customers replacement benefits, while sellers are unable to return unsold stocks back to the company for other models.

Realme on June 19 said that it has sold over 2 lakh units of the latest Realme 11 Pro series in India, calling it a sales record for the lineup.

“The so-called immense success of your latest flagship, Realme 11 Pro…has resulted in a significant number of activated units flooding the retail market due to your brand’s modus operandi,” All India Mobile Retailers Association (AIMRA) wrote in a strongly-worded letter to the company on June 26. ET has seen a copy of the letter. AIMRA represents over 1.5 lakh retailers across India.

“Realme devices undergo rigorous security checks and certifications before being made available in the market and we will continue to uphold the highest standard of operations and quality. Realme never sells pre-activated smartphones. We kindly request customers to verify the IMEI number slated on the box before making the purchase of the device,” a company spokesperson said in a statement to ET.

Retailers claimed the practice of pre-activation also poses a national security threat as the final owner of a pre-activated device is not the same as registered by the seller.

Some sellers often activate the devices by inserting a SIM card to count them as devices sold in the market. They then repackage it and sell it as a fresh unit to customers later down the line. This practice is called pre-activating devices. Sales are tracked through the number of devices activated in the market.

“Innocent retailers are forced and misguided by the brand representatives to carry pre-activation to provide benefits to the consumer and self, to survive in this stiff competitive environment arising due to e-commerce companies. By doing this, they are unknowingly involved in the cybercrime,” AMIRA had previously written to Realme in a letter dated December 30.

Mobile retailers said they have written to Realme multiple times from 2021 to introduce a portal through which the sold devices can be tracked accurately, similar to the Global Market Communication System (GMCS) in use by Samsung for retailers to key in the IMEI number of the devices they have sold to prevent misuse.
“This portal would address various issues and challenges that affect consumer rights when purchasing a new handset,” AIMRA said in its June letter.

Other brands like Vivo and OnePlus have stopped offering activation-based sales schemes to retailers, AIMRA said, while Xiaomi is in the final stages of implementing a solution like Samsung. Realme, however, has held back on delivering the same despite publicly acknowledging that a portal was under works to address the issue of pre-activations in April last year.

“In the light of recent events, Realme must take immediate action by launching the GMCS portal. During this period, all activation schemes (sale-out) should be suspended, and instead, the offers should be made available to consumers through sale-in means on retailers’ purchase invoices (sale-in),” said Kailash Lakhyani, the founder of AIMRA. “It is unfair to shift the blame onto customers and retailers who have unknowingly become victims of the brand’s questionable practices.”

Realme has been fast losing market share over the last few quarters, falling to fifth position in Q1 from third at its peak in Q1 2022. The fall has coincided with a change in personnel at the top levels, with CEO Madhav Sheth exiting with key executives.



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